LA CONSOLACION COLLEGE
Bacolod City
FINAL Exams TAX 2
Name/course/year:
I.
Date:
Score:
Rating:
TRUE OR FALSE. ANALYZE the following statements and write TRUE if the statement is correct and write FALSE if it
is wrong. AVOID ERASURES.
________1. A small business enterprise with gross receipts of not exceeding P1.5 million may be taxed at 12% (VAT) or 3%
(Non-VAT) at the option of the taxpayer.
________2. Clubs and caterers are subject to Amusement tax.
________3. A radio station with an annual gross receipts of P2,000,000 but voluntarily subjects itself to VAT can never cancel
its registration and revert back to Franchise Tax even it later on decides to abandon VAT.
________4. Taxpayers which are subject to Other Percentage Taxes are generally required to file its tax return within 20 days
after the end of each month.
________5. The sale of listed and traded shares of stocks after the initial public offering is exempt from business tax.
________6. The gross sales of a bar inside a passenger ship is subject to Amusement Tax of 18%
________7. Service charge which nightclubs collect from their customers, and represented as charges in lieu of cash tip to the
employees are included in the term “gross receipts” which are subject to Amusement Tax
________8. If there are vending machines installed by Coca-cola inside the premises of race tracks, the sales effected in the
vending machines shall be subject to Amusement Tax of 30%.
________9. The gross receipts of a bank which operates a canteen where foods are served at subsidized prices exclusively to
its employees is subject to Tax on Banks notwithstanding the fact that the canteen is operated on a non-profit
basis.
________10. A private carrier which undertakes to deliver goods at a particular place without being bound in law to undertake
such transportation and does not bind himself out to the public is subject to 3% Common Carrier’s Tax.
________11. The filing of quarterly income tax returns and payment of quarterly income tax by corporations are mere
instalments and therefore, not the basis in computing the 2 year prescriptive period for refund.
________12. If the tax has been withheld from source (withholding on wages), the prescriptive period for refund is counted
from the date it falls due at the end of the taxable year.
________13. The power of the Commissioner of Internal Revenue to inquire into the bank deposits of the taxpayer is in conflict
with the Secrecy of Bank Deposits Law.
________14. The Commissioner of Internal Revenue may authorize an examiner to inquire into the bank deposits of a taxpayer
who is suspected to have committed fraud in declaring his income.
________15. The decision of one division of the Court of Tax Appeals may be reviewed on appeal by the court en banc.
________16. The Court of Tax Appeals is inferior to the Court of Appeals but it is in the same level with the Supreme Court.
________17. When the justices of the Court of Tax Appeals sit in two (2) divisions, each division shall be composed if three (3)
justices; the presence of two (2) will constitute a quorum and the vote of the two are required to render a decision.
________18. When the justices of the Court of Tax Appeals sit en banc, the presence of four (4) constitute a quorum and the
vote of four (4) justices are required to render a decision.
________19. Ambassadors of foreign countries are required to pay the community tax
________20. If a person loses the benefit of exemption on June 20 of the current year, he shall be liable for the community tax
on that same day.
________21. Resident aliens are exempt from the payment of community tax
________22. The provisions of law governing the imposition of community tax is found in the National Internal Revenue Code
(NIRC)
________23. For purposes of community tax, a general professional partnership is taxable as a corporation
________24. Aliens who have stayed in the Philippines most of the time during the taxable year are required to pay community
tax in the Philippines.
________25. Barangay treasurers can be deputized to collect the community tax in their respective jurisdictions.
MULTIPLE CHOICE. EVALUATE each statement and the choices, then, APPLY your knowledge by selecting the best
answer and write the letter only on the space provided before each number. AVOID ERASURES.
________1.
One of the following is subject to 3% percentage tax.
A.
B.
C.
D.
________2.
Establishments whose annual gross sales or receipts exceed P1,500,000 and who are VAT registered
Businesses whose annual gross receipts or sales exceed P1,500,000 and who are not VAT registered
VAT registered establishments whose annual gross receipts do not exceed P1,500,000
Establishments whose annual gross sales do not exceed P1,500,000 and who are not VAT registered
Rustic owns a small eatery near a trimobile parking area. Its annual gross receipts range from P400,000 to
P450,000. In January, the gross receipts amounted to P27,500 while purchases of goods subject to VAT is
P6,000 and not subject to VAT, P13,000. If Rustico is not a VAT registered taxpayer, his percentage tax due for
the month is A. 12,000
B. 1,900
________3.
Using the data in No. 2, assume that Rustico is a VAT registered taxpayer and the amounts indicated are
exclusive of VAT, the value added tax due is
A. 12,000
B. 1,900
________4.
Subject to income tax but exempt from percentage tax
Subject to value added tax if the gross annual receipts exceed P1,500,000
A marginal income earner and therefore, exempt from common carrier’s tax and value added tax
Subject to common carrier’s tax of P3,300.
The franchise tax on grantees of radio and television broadcasting companies whose annual gross receipts in
any year do not exceed P10,000,000 shall be
A. 1% of gross receipts
B. 2% of gross receipts
________6.
________9.
C. 28,638
D. 5,832
Which of the following is not considered as a percentage tax?
A.
B.
C.
D.
________8.
C. 3% of gross receipts
D. 4% of gross receipts
Junjun M. operates the Peacock Nightclub along Avenida Avenue, Manila. His gross receipts in February 2016
amounted to P126,700. The foods and drinks being served inside the night club are being delivered by Tiberio,
a non-VAT taxpayer. During the month, Tiberio sold P32,400 worth of goods and drinks to Junjun M. The
amusement tax payable is A. 19,005
B. 22,806
________7.
C. 2,580
D. 2,500
Malakas Wesley owns two passenger buses. Each bus has a seating capacity of 45 passengers. The buses only
ply route Naga City to Legaspi City, and vice versa. During the month, he decided to stop the operation of one
unit to undergo two weeks engine overhaul. Thus, his total gross receipts during the month amounted to
P110,000 only. Malakas Wesley is A.
B.
C.
D.
________5.
C. 825
D. 2,500
½ of 1% stock transaction tax on shares traded through the local stock exchange
10%-20% tax on shares not traded through the local stock exchange
10% stock overseas communications tax
3% tax on keepers of garage
Bayani’s ticket (daily double) won P42,000, gross of withholding tax and cost of ticket, in a horse race in San
Lazaro Hippodrome. His ticket had cost him P250. How much tax was withheld on winnings in horse races by
Bayani?
A. 1,680
B. 4,200
The income tax returns must be filed in
C. 1,670
D. 4,175
A. Duplicate
B. Quadruplicate
________10.
A notice to the effect that the amount therein stated is due from a taxpayer as a tax with a demand for payment
of the same within the stated period of time
A. Assessment
B. Forfeiture
________11.
C. Triplicate
D. Quintuplicate
C. Audit engagement letter
D. Institution of criminal action
A pre-assessment notice is required A. Before a final notice of assessment is sent to the taxpayer
B. When a discrepancy has been determined between the tax withheld and the amount actually remitted by
the withholding agent
C. When an article locally purchased or imported by an exempt person has been sold, traded or transferred to
non-exempt persons
D. When the deficiency tax is the result of mathematical errors in the computations appearing on the face of
the return.
________12.
Before a formal notice of Assessment is issued, the taxpayer is required to respond to the Preliminary
Assessment Notice within a period of A. 30days
B. 15 days
________13.
Where a return was filed, as a general rule, the prescriptive period for assessment after the date the return was
due or was filed, whichever is later, is within
A. Three years
B. Ten years
________14.
C. Garnishment of bank accounts
D. Filing of criminal case in court
The seizure by the government of real property and interest on rights to property of the taxpayer to enforce the
payment of taxes followed by its public sale
A. Confiscation
B. Distraint
________19.
C. April 15,2016
D. February 20,2017
Which of the following is not an extrajudicial remedy of the government against the taxpayer?
A. Distraint of personal property
B. Levy of real property
________18.
C. April 15, 2008
D. March 10, 2009
Cosa filed a fraudulent income tax return for the year 2005 on April 11, 2006. The Bureau of Internal Revenue
(BIR) discovered the fraud on February 20, 2007. The last day for the BIR to collect or send an assessment
notice is
A. April 11,2009
B. April 15, 2009
________17.
C. April 15, 2009
D. April 15, 2016
Mr. Lacson filed an income tax return for the calendar year 2005 on March 10, 2006. The BIR assessed a
deficiency income tax on April 10, 2008. When is the last day for the BIR to make an assessment?
A. April 15, 2009
B. April 10, 2008
________16.
C. Five years
D. Answer not given
Bernadette filed her 2005 Income Tax Return and paid the tax due thereon on April 1,2006. The last day for the
Bureau of Internal Revenue to send an assessment is
A. April 1, 2009
B. April 15, 2011
________15.
C. 45 days
D. 6 months
C. Forfeiture
D. Levy
The summary of remedies of distraint of personal property shall be exercised by the Commissioner of Internal
Revenue of the amount involved is in excess of A. 10,000
B. 100,000
C. 1,000,000
D. 10,000,000
________20.
Cruzada filed an income tax return for the calendar year 2004 on March 10, 2005.the BIR issued a deficiency
income tax on April 10, 2007 which has become final. When is the last day for the BIR to collect?
A. April 10, 2012
B. April 15, 2008
________21.
Date when assessment was received
Petition for reconsideration was filed with BIR
Decision of denial was received
2nd request for reconsideration was filed with BIR
Date of BIR revised final assessment was received
C. April 15, 2010
D. March 10, 2008
10/01/2007
10/09/2007
07/02/2008
07/15/2008
07/05/2009
Last day to appeal to the Court of Tax Appeals
A. July 15, 2009
B. August 4, 2009
________22.
For filing a false and fraudulent return, a surcharge is imposed. Which of the following is correct?
A. 50% as administrative penalty
B. 50% as criminal penalty
________23.
To interpret ax laws and to decide tax cases
To summon, examine and take testimony of persons
To make assessment and prescribe additional requirements to tax administration and enforcement
To review on tax cases decided by the Court of Tax Appeals
This is not within the power of the Commissioner of the Internal Revenue to make an assessment –
A.
B.
C.
D.
________27.
A commissioner and 3 Deputy Commissioners
A commissioner and 5 Deputy Commissioners
A commissioner and 4 Deputy Commissioners
A commissioner and 2 Deputy Commissioners
The Chief Officials of the Bureau of Internal Revenue
A.
B.
C.
D.
________26.
Examination of returns and determination of tax due
Conduct inventory-taking and surveillance
Compromise tax cases
Inquire into bank deposit accounts
The power to interpret the provisions of the National Internal Revenue Code shall be under the exclusive and
original jurisdiction of the –
A. Commissioner of Internal Revenue
B. Secretary of Justice
________28.
C. Secretary of Finance
D. Court of Tax Appeals
An exception to the non-delegation of the legislative power of Congress –
A. Revenue Memorandum Order (RAMO)
B. Revenue Special Order (RSO)
________29.
C. Distraint
D. Suspension of action
The Chief Officials of the Bureau of Internal Revenue
A.
B.
C.
D.
________25.
C. 25% plus 50%
D. 25% as criminal penalty
A contract whereby the taxpayer and the government by reciprocal concessions avoid litigation or put an end to
one already commenced A. Confiscation
B. Compromise
________24.
C. August 5, 2009
D. September 5, 2009
C. Revenue Regulations (RR)
D. Revenue Travel Assignment Order (RTAO)
The Commissioner of Internal Revenue or his authorized representative may order suspension or closure of a
business establishment for a period of not less than 5 days for any of the following violations, except:
A. Failure to claim presumptive input taxes
B. Failure to issue receipts and invoices
C. Failure to file a quarterly VAT return
D. Understatement of taxable sales by 30% or more of his correct taxable sales for the quarter.
________30.
Which of the following cases cannot be the subject of a compromise?
A.
B.
C.
D.
________31.
Those pending before the Commissioner of Internal Revenue
Those filed in the Regional Trial Court
Cases filed in the Office of the City Prosecutor
Cases under investigation by a Revenue Examiner
Non-payment of the following is not a ground for imprisonment
A. Income tax
B. Value-added tax
________32.
C. Community tax
D. Donor’s tax
An exempt individual may secure community tax certificate by paying –
A. P5.00
B. P1.00
________33.
C. P10.00
D. None
Salariosa, a resident of Cubao, Quezon City, single owns a restaurant in CM Recto
Ave., Manila and in Cubao, Quezon City. In 2015, it had the following data:
Manila
Quezon City
Gross Receipts
4,055,015.20
3,624,980.60
Expenses
3,296,423.10
3,025,114.80
For 2016, the total basic and additional community tax payable by Salariosa is A. 7,074
B. 7,679
________34.
Using the information in No.33, the community tax for 2016 is payable on or before
A. April 15, 2015
B. December 31, 2016
________35.
C. 1,363
D. 5,005
C. February 28, 2016
D. January 31, 2016
Using information from No. 33, if the tax is paid on April 30, 2016, the amount payable is
A. 5,205.20
B. 6,206.20
C. 5,405.40
D. Cannot be determined
Good Luck!!
Nikki G. Estores, CPA, MBA
Key Answers:
1. True
2. False
3. True
4. True
5. False
6. False
7. False
8. False
9. False
10. False
11. True
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
True
False
False
True
False
True
True
False
True
False
False
False
True
True
True or false:
1-10 other percentage tax
11 to 12 remedies
13 to 18 BIR and CTA
19 to 25 Community Tax
MC
1-8 other percentage taxes
9-23 remedies
24-30 BIR and CTA
31-35 community tax